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Video: Caterpillar Construction Up 47 Percent

Caterpillar's 2017 was a very good year - 4Q sales and revenues up $3 billion over 2016's fourth quarter

January 25, 2018
Caterpillar 4Q sales and revenues were up $3 billion

Caterpillar showed a $3 billion increase in sales for 4Q 2017 over 2016.

Sales and revenues in the fourth quarter of 2017 were $12.9 billion, compared with $9.6 billion in the fourth quarter of 2016.

Full-year sales and revenues in 2017 were $45.5 billion, up about 18 percent from $38.5 billion in 2016.

2018 Outlook

Caterpillar said it is beginning 2018 with strong sales momentum resulting from strong order rates, lean dealer inventories and an increasing backlog.

Additionally, there are positive economic indicators across most of the world and in many of the company’s end markets. Caterpillar is preparing its factories and suppliers to be ready for continued growth, while remaining focused on managing with a flexible and competitive cost structure that should enable the company to respond quickly if economic fundamentals change.

The company expects 2018 profit per share in a range of $7.75 to $8.75. Excluding restructuring costs of about $400 million, adjusted profit per share is expected in a range of $8.25 to $9.25.

"We are in the early stages of implementing our strategy for profitable growth," said CEO Jim Umpleby. "In 2018, we expect to make additional investments in the expanded offerings and services important for Caterpillar’s long-term success. We will use our Operating & Execution Model to bias resources to areas that represent the greatest opportunity for return on our investments.

“Our focus on operational excellence will not waver as we work to develop a more competitive and flexible cost structure, including implementing leanmanufacturing principles. We are positioned to capitalize on continued sales momentum or quickly adjust should conditions change,” added Umpleby.

Following is a summary of the key drivers of sales assumptions included in the outlook:

Construction Industries

– The company expects growth in 2018 with some tempering in the latter part of the year, largely due to anticipated seasonality of sales in China. Caterpillar expects improvement in North American residential, non-residential and infrastructure. The outlook does not include any impact from a potential U.S. infrastructure bill. Europe and Asia/Pacific are expected to continue to grow, and the recovery that started in Africa/Middle East and Latin America is expected to extend into 2018.

Resource Industries

– The company believes that global economic momentum and increasing commodity prices are restoring miners’ business confidence and financial health. The company anticipates miners’ capital spend to increase as mining businesses invest in equipment replacement cycles. Higher machine utilization levels should support continued strong aftermarket parts opportunities. Strong global demand is expected to be a positive for heavy construction.

Energy & Transportation

– Sales into Oil and Gas applications are expected to increase in 2018, led by reciprocating engines for gas compression and well servicing in North America. The current turbines backlog is healthy in support of the midstream pipeline business. The company expects an increase in Transportation primarily from recent acquisitions in rail services, whilethe locomotive and marine markets are expected to remain challenged. Power Generation sales are forecast to be slightly up after a multi-year downturn. Sales into Industrial applications are expected to be about flat.

Caterpillar's full Q4 and 2017 full year results are available here:

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